TRADE NEWS BULLETIN Volume II Number 50 Wednesday, March 17, 1993 _________________________________________________________ NAFTA News Summary _________________________________________________________ NDP LEADERS OPPOSE NAFTA, CANADA MAY HALT RATIFICATION Four leaders of Canada's opposition New Democratic Party (NDP) are calling for the scrapping of the North American Free Trade Agreement (NAFTA). The Parliamentary members, who are meeting with U.S. legislators and labor, consumer and environmental groups, say NAFTA's shortcomings cannot be corrected through side agreements. "We believe the accord itself has too many serious flaws which cannot be corrected by supplemental accords," said David Barrett, a Member of Parliament and former Premier of British Columbia. Barrett warned the side talks could distract attention from the actual NAFTA text, leading to the trade pact's passage without considering its implications for Canadian jobs, health and safety standards, human rights and environmental abuses. Meanwhile, Canadian Trade Minister Michael Wilson told reporters that Canada may not approve NAFTA until it is ratified in the U.S. and Mexico. Wilson said, "If we get the legislation done, then we don't have to give it royal assent until the other countries have completed their legislation." Royal assent is the final stage needed in Canada to convert legislation into law. "Maybe we'll want to see how everything is going in other places." Canadian analysts say the recession and the restructuring of the Canadian economy have caused job losses and increased fears of a more open trade regime. Sources: Nancy Dunne, "NAFTA Test for Clinton's Team," FINANCIAL TIMES, March 17, 1993; Robert Kozak, "Canada Unsure on NAFTA Side Talks," REUTER, March 16, 1993; "Four Canadian Lawmakers Visit U.S. to Fight NAFTA," REUTER, March 16, 1993; "BC-Trade- NAFTA-Canada," REUTER, March 16, 1993; "Wilson Baffled by U.S. Stance on NAFTA," NEWSCAN, March 12, 1993. _________________________________________________________ NEC WARNS U.S. AGAINST SIDE PACT ON IMPORT SURGES The National Economic Council (NEC) drafted a three-page paper warning U.S. President Bill Clinton against creating a third supplemental accord to NAFTA on import surges. Negotiations begin today on establishing labor and environmental accords not covered in the original NAFTA text. Most analysts expect the import surge request to be dropped. The NEC forwarded six arguments against the accord during a meeting with the Office of the U.S. Trade Representative March 2-3. It said such an agreement would "more likely be used against U.S. exports than to protect U.S. industries," mainly due to Mexico's growing trade deficit and relatively small economy. In addition, the NEC predicted an unfavorable response to the accord from U.S. trade partners and accused the U.S. of bowing to sugar industry demands to reopen NAFTA. The NEC wrote, "Accommodating sugar would be likely to elicit similar demands to re-open NAFTA from industries in all three countries." Sources: "Confidential Options Paper Signals Likely Dismissal of Clinton Surge Pledge," INSIDE U.S. TRADE, March 12, 1993; "Wilson Baffled by U.S. Stance on NAFTA," NEWSCAN, March 12, 1993. _________________________________________________________ CITRUS GROWERS EXPECT LOSSES UNDER NAFTA Florida's citrus industry expects to get hit hard if NAFTA is ratified. Bob Behr, an economist with the Florida Department of Citrus, said Mexico's lower wages and lax labor and environmental regulations will allow Mexican producers to offer citrus that is $2 a box cheaper than the U.S. equivalent. The average daily wage for agriculture producers in Mexico is about equal to the hourly wage in the United States, he said. Box prices in Florida averaged $2.36 in January. Behr predicted that if the current text of NAFTA is implemented, with its provisions to eliminate some tariffs within ten years, Florida growers would either relocate to Mexico or leave the business altogether. Mexican citrus production has more than doubled in the past ten years, making it the fifth largest producer in the world, behind Brazil, the U.S., China and Spain. Source: Cynthia Rupert, "Trade Pact Expected to Put Squeeze on Florida's Citrus Producers," JOURNAL OF COMMERCE, March 11, 1993. _________________________________________________________ GATT News Summary _________________________________________________________ EC GATT OFFICIAL CRITICIZES WWF FOR DENOUNCING MTO The EC's ambassador to GATT, Tran Van Thinh, rejected charges leveled by the World Wide Fund for Nature (WWF) that the proposed Multilateral Trade Organization (MTO) would be undemocratic and ignore environmental concerns. In a five-page letter to the group, Tran insisted the MTO would be a democratic organization and "will in no way prevent governments from protecting the environment." WWF policy analyst Charles Arden-Clarke said non-governmental bodies seek a legal commitment in the MTO that will permit consultations beyond the official inter-governmental level "so that interested parties can request hearings or table submissions in dispute panel hearings." The MTO was proposed in the Dunkel Draft of the Uruguay Round to replace GATT and provide enforcement of international trade decisions. According to high-level sources, the U.S. supports making the dispute settlement process more transparent than the current GATT process. The EC, Japan, and Canada support continuing the closed-door format. Source: John Zarocostas, "GATT: Plan Allows Environment Protection," JOURNAL OF COMMERCE, March 11, 1993. _________________________________________________________ Resources: DEMOGRAPHIC DYNAMICS OF THE U.S.-MEXICO BORDER, a book edited by John R. Weeks and Roberto Ham-Chande. Includes updated versions of papers presented at the Binational Symposium on Population Issues Along the U.S.-Mexico Border. Published by: Texas Western Press, El Paso, 1992. _________________________________________________________ Produced by: Kai Mander and Gigi Boivin The Institute for Agriculture and Trade Policy (IATP) 1313 Fifth Street SE, Suite #303 Minneapolis, MN 55414-1546 USA Telephone:(612)379-5980 Fax:(612)379-5982 E-Mail:kmander@igc.apc.org _________________________________________________________